Treasury could axe NI relief on employer pension contributions
01 November 2017
FT Adviser reports that pension experts have warned that the government could be set to end a national insurance exemption on pension contributions from employers.
Currently, employers have to make a minimum 1 per cent contribution to their employees’ pension, under automatic enrolment rules. These payments are exempted from paying national insurance under legislation published in 2006.
According to Office for National Statistics (ONS) data, this exemption is believed to have had a cost for the government of £15.7bn in 2015 to 2016, the greatest amount in the last 16 years as the number of people signed up to their workplace pension due to automatic enrolment has increased.
Sir Steve Webb, director of policy at Royal London, is reported to have told FT Adviser that ending this national insurance exemption on contributions could be a way of getting some of the tax relief money back.
As we get nearer to the Chancellor’s Budget on 22 November, speculation mounts as to where additional funds for the Exchequer will come from. The Policy team will as usual be providing coverage via twitter throughout Philip Hammond’s speech so be sure to tune in on the day #AutumnBudget2017. We will also provide our usual concise summary of relevant announcements after the event, which will be published on the news page of our website.